Business Secretary Vince Cable has warned the new Government will rein in financial support for the British motor industry.
Speaking at a conference in London arranged by the Society of Motor Manufacturers and Traders (SMMT), he said, “Our starting point is very clear. We’ve moved on from the era of subsidies. We just have to be realistic about what’s affordable.”
But he also insisted that the car industry is “incredibly important to the UK economy” – “we’re not walking away from the industry”.
The electric car subsidy – which offers buyers up to £5,000 towards the cost of an electric car – is still under threat. The former government had vowed to set aside £250,000 to the scheme, which had been scheduled to come into effect next year.
Vince Cable did not hint at when a decision would be made, saying, “It is still actively under consideration.”
Senior industry officials again stressed today the need for continuing support for the industry’s efforts to cut emissions and to help transform the UK into a low carbon economy.
The news comes a few weeks after it was announced Nissan is to receive a £20 million grant towards building electric cars at its car plant in Sunderland. David Cameron confirmed the new Government will honour the grant set aside by Lord Mandelson earlier this year as part of a deal that will see Nissan’s all-electric Leaf manufactured in Britain.
Nissan is to begin production of its new Leaf electric car in the UK in 2013.
Following the Government’s Scrappage Incentive Scheme, do you think the motor industry deserves more help? Is the Government right not to favour this industry to the possible detriment of other areas? Have your say below.
By Rhian Angharad Jones
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I think they need to be very careful in what they decide. Whilst the motor industry needs to stand on it’s own two feet, the minute it becomes cheaper to be elsewhere – the manufacturers will relocate. If they want a car manufacturing sector in the u.k. (which employs a lot of people) they should beware any immediate withdrawals and instead phase out support gradually. What support is currently in place?
It’s worth remembering that the scrappage scheme was almost certainly a net gain for the Treasury once you take into account the revenue brought in through VAT….
Not exactly what I call a handout.